D.—No. 1

which is now in progress, with the General Government, the contract entered into by Mr. Crosbie Ward be not ratified by the General Government, the full amount of subsidy payable under the contract will be undertaken by the Province of Canterbury. No. 87. Westminster Palace Hotel, London, May 19th, 1864. Sir,— I beg to acknowledge the receipt, on the evening of the 17th instant, of your despatch p. 64—68, dated March 7th, instructing me to communicate to the Intercolonial R.M.S. Company that, until accepted and ratified by the New Zealand Government, the Panama Contract made by Mr. AVard cannot be considered as in any way binding on the Colony. On the 18th I called on Mr. Worley, the Secretary, and I read your despatch to him; I also left a copy with him for the information of the Directors. Mr. Worley expressed some surprise at the communication, when I assured him the sole reasons which led the New Zealand Government to doubt the propriety of ratifying the contract were —first, the excess of money to be paid beyond the amount of £30,000 voted by the Legislature for the establishment of a route via Panama, an excess which had not been authorized, and which the finances of New Zealand were not in a position to bear; and secondly, the extension of the original Coleman Contract, which was never contemplated, and which Mr. Ward had no instructions to effect. Mr. Worley stated that Mr. Ward could produce no such instructions in writing, but that the Company had taken Counsels' opinion as to his powers, which was that if, in conjunction with his general powers as PostmasterGeneral, Air. Ward had been verbally instructed on these points, his powers would be sufficient to enable him to make a valid contract; that when this opinion was stated to Mr. Ward, he replied that such verbal instructions had been given. I said that I was not aware of any such instructions, either directly or indirectly, having been given to Air. Ward. Mr. Worley will bring the communication I wrote to him under the notice of the Directors of the Company. I have, &c, Beader Wood. The Hon. the Postmaster-General, Auckland. No. 88. Christchurch, New Zealand, 2nd June, 1864. Sir, — With reference to the correspondence upon the Panama question, which has lately reached me in a printed shape, published by order of the Government, I desire to express a regret that so much that is of an unofficial character should have been sent to press without my having an opportunity to revise it. Had circumstances permitted such revision, the important parts of the correspondence might in my opinion have been made more correct and complete, and at the same time an opportunity would have been given to me to correct or withdraw some matter that appears undesirable to publish. Among other errors in the correspondence which it would have been desirable to correct, I beg leave to point to two which are of some importance. The letter No. 39, from myself to the Honorable the Colonial Secretary, dated 25th October, 1863, ought to have been withdrawn from the correspondence altogether. It was written in readiness for the October Mail, but its despatch was prevented by the fact that the Intercolonial Royal Mail Company, at the last moment, raised a question which required some time to settle. In place of this letter I wrote another, on the 24th November, 1863, which appears in its proper place, as No. 50. But in my absence from home the former letter of October was erroneously posted, it being supposed that Iso intended. And the two letters were thus despatched by the same mail. The second letter, that of 24th November, No. 50, contains a serious clerical error. The difference in cost of the services therein computed is wrong by the sum of ten thousand pounds. The figure two ought to be substituted for the figure one in the 31st and 24th lines from the bottom of the 31st page. Both these errors were pointed out by me to the Honorable Mr. Gillies, in going through the correspondence, and were noted in a memorandum at the time for the guidance of the compiler and printer. They are, however, easy to explain ; and I do myself the honor to request that you will direct such explanation to be made on the subject as you may think desirable, either to accompany any further general issue of the papers, or to be presented with them to the General Assembly at its next meeting. I have, &c, Crosbie Ward. The Honorable the Colonial Secretary, Auckland.

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